6 ms·

Can anyone chime in as to how it is legal to remove someone's ownership from a company like that?

• Blackstone4 7y ago
  Bankruptcy .... when people use the word 'restructuring' it typically refers to some sort of change in the capital structure/ownership where by equity and maybe even some of the debt is either wiped out, worthless. When accepting venture funding, the VC capital will come in as preffered equity which is similar in some ways to permanent debt with no interest payments.
• deleted 7y ago
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• _puk 7y ago
  From experience.. Old company is renamed something like "legacyabc" A new company is formed with the old company's name. All personnel and IP is moved to the new company", all debt is left in the old company. Original share holders get a big payout. The old company is now worthless. Shares are now worth less than the original strike price. Original company is likely dissolved. Bad luck. Generally you'll have to sign a new contract in the new company to keep working. If you're really unlucky, your L1 (or w/e) visa is tied to the old company, you now have to leave the country, and can't easily transfer to this new company.
• pbrb 7y ago
  It happened to me as an employee - during an acquisition we were force liquidated at a price that was just above strike. A few people made some money, but most people made a couple thousand dollars. A couple years later we all got checks in the mail for reimbursement on overage from tax withholding.
• deleted 7y ago
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